Bush Fuel Economy Standard Extends America's Oil Addiction

March 29, 2006

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

Washington, D.C. — Changes announced today to the corporate average fuel economy (CAFE) regulations for light duty trucks fall far short of the oil-addiction recovery goal set by President Bush in his State of the Union address, according to the American Council for an Energy-Efficient Economy (ACEEE).

The President has called for a 75 percent reduction in Middle East oil imports by 2025. "This weak CAFE standard squanders his first chance to make good on that vow," stated Steven Nadel, Executive Director of ACEEE. The President's stated goal amounts to a reduction of approximately 5 million barrels per day by 2025. The new light truck fuel economy requirements, which call for a projected 1.8 MPG increase between 2007 and 2011, yields roughly one-seventh of that amount. Even generously assuming that more than half of the Middle East oil reductions could be achieved through non-CAFE measures and that similar fuel economy hikes would be added through 2016, the proposal will still fall short of meeting the President's goal.

The projected 1.8 MPG increase announced today is simply too weak, according to ACEEE. The organization recommends an increase at least double the levels set today over the 2007-2011 period, with further improvements in subsequent years. "Modest short-term increases can be made to look good on paper, but long-term improvements are where you'll truly see the oil savings," noted Jim Kliesch, Research Associate with ACEEE's Transportation program.

Light truck CAFE changes were initially proposed by the National Highway Traffic Safety Administration (NHTSA) in August 2005, and at the time received widespread criticism for being based upon unrealistic government gasoline price projections of approximately $1.50 per gallon. Despite the fact that fuel price projections have increased to more than $2.00 per gallon since the proposed rule was issued, NHTSA raised its original proposal by a mere 0.1 MPG. The change, commented Nadel, is "laughable."

The final rule could also cause the nominal overall light truck fuel economy to be eroded by allowing unlimited sales of lower mileage, larger trucks. Today's final rule radically restructures the fuel economy rules to base light truck MPG requirements on vehicle size. This change allows automakers to sell large numbers of full-size pickups and SUVs without offsetting them with sales of more fuel-efficient trucks, as had been required under the previous CAFE system. Now, depending on a manufacturer's model offerings, the new regulations could yield a lower average fuel economy for trucks than was required under the previous system. "This is deck chair rearranging, only worse," noted Nadel. "Under this new system, the MPG gains are not assured for a manufacturer's truck fleet. A shift in the vehicle mix can cause oil savings to evaporate."

One positive element of today's announcement is the new requirement that the largest SUVs on the market be brought under the CAFE umbrella. To date, pickups and SUVs with gross vehicle weights between 8,500 and 10,000 lbs., known as "Class 2B trucks," have been exempt from all fuel economy regulations-despite the category containing many popular models. Today's announcement requires SUVs to meet fuel economy requirements, though large pickups, which account for roughly 80 percent of all Class 2B trucks, remain exempt. "Bringing in the SUVs is a small step in the right direction," stated Kliesch. "But it's difficult to praise NHTSA when four out of five of these vehicles are still exempt from any fuel economy requirement."

Summarizing the package as a whole, Nadel commented, "The Administration has clearly dropped the ball. It's time for Congress to pick it up and run with it."